all sectors see declining average work hours per employee ... · 2 what in the world (economy) is...
TRANSCRIPT
EIC conference:
Is investment our silver bullet?
Sutapa Amornvivat, Ph.D.
Chief Economist & First Executive Vice President
Economic Intelligence Center (EIC)
8 June 2016
2
What in the world (economy) is going on?
World’s Economic Leader Timeline
1980s
?
1990s Early 2000s
Mid 2000s Today 2016
What is holding back the global recovery?
3
Gig economy
Aging population
Debt overhang
Technologies replacing labor
What is holding back the global recovery?
4
Gig economy
Aging population
Debt overhang
Technologies replacing labor
What is holding back the global recovery?
5
Gig economy
Aging population
Debt overhang
Technologies replacing labor
What is holding back the global recovery?
6
Gig economy
Aging population
Debt overhang
Technologies replacing labor
Great Depression
World War
II
0%
3%
6%
9%
12%
15%
19
25
19
30
19
35
19
40
19
45
19
50
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
10
20
15
Has this worldwide struggle happened before?
Source: EIC analysis based on data from FRED, Federal Reserve Bank of St. Louis; Summers (2016)
U.S. Long-term interest rates
7
Fiscal expansion Monetary easing Currency intervention
What are the policy options to jump start demand?
8
Option 1: Monetary easing
What do we get from trillions of dollars put in by central banks?
Note: 1. Central banks’ asset size pre-crisis (at the beginning of 2007) and post-crisis (at the end of 2015) 2. Pre-crisis period is 2000-2007 and post crisis, 2008-2015 3. Total QE size of US Fed, BOJ, ECB and BOE as of end of 2015 Source: EIC analysis based on data from Bloomberg
9
GDP Growth average2
Central banks’ asset size (% of GDP)1
Japan US Eurozone
2.7 1.2 2.2 0.1
13 27 22
1.5 0.2
77 25 6
$7.1 Trillion3
Combined size of QE
Option 2: Currency intervention
Can we make our currency cheap and export our way to growth?
Source: EIC analysis based on data from IMF; Eichengreen and Irwin (2009)
10
1928 1931 1934 1936 1938
% Tariff on imports
10 14 8 7
US UK DE FR
16 24 33
17
US UK DE FR
% Tariff on imports
Option 2: Currency intervention
Can we make our currency cheap and export our way to growth?
Source: EIC analysis based on data from IMF; Eichengreen and Irwin (2009)
11
US currency watch list
2015 2016
Interest rate cut
12
Source: EIC analysis based on data from Bloomberg
Option 2: Currency intervention
Can we make our currency cheap and export our way to growth?
Flattened FX appreciation path
0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.13%
Option 3: Fiscal expansion
Can governments step up to fill in the missing demand?
*Suspended by Congress from Oct 2015 – Mar 2017 Source: EIC analysis based on data from IMF and U.S. Department of Treasury
13
Asia
Debt ceiling: 60%
56%
48%
44% 25%
248%
Japan US
$19.1tn
Debt ceiling: $18.1tn (Currently suspended*)
132%
99%
93%
75%
Debt ceiling: 60%
Eurozone
Option 3: Fiscal expansion
Can governments step up to fill in the missing demand?
Source: EIC analysis based on data from World Bank
14
130 141
186
172
90
0
50
100
150
200
250
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Thailand’s real investment is still below its pre-Asian-Financial-Crisis level Real investment (Index: 1996=100)
Manufacturing Services
What kind of public investment would yield best returns for us?
Source: EIC analysis based on data from World Bank
15
Changes in share of GDP (2000-2013)
-2.7 +2.4
-3.5 +4.2
-4.9 +5.2
-1.8 +7.1
+0.1 -2.9
-2.8 +3.6
What are our top picks for service businesses in Thailand?
16
CLMV-linked Tourism ICT
How do we ensure a healthy growth in tourism?
* As of 2013 Source: EIC analysis based on data from AOT, Phuket Municipality, WHO, TAT and UNWTO
17
Number of tourists visited in Thailand vs world Unit: million tourists
2005 2015 2025F
809 1,184
1,645
13
30
How do we ensure a healthy growth in tourism?
* As of 2013 Source: EIC analysis based on data from AOT, Phuket Municipality, WHO, TAT and UNWTO
18
Number of tourists visited in Thailand vs world Unit: million tourists
2005 2015 2025F
809 1,184
1,645
13
30
Road traffic death rate* Unit: deaths per 100,000 population
World 17.4
36.2
18.8
16.6
How could we capture new growth segments?
Source: EIC analysis based on data from TAT and UN
19
2005 2015 2025
16% 19% ?
Thailand’s tourist structure Unit: % of the total number of tourists
>55+
15%
2005 2025F
29%
27% 35%
23% 31%
% of elderly population
What are our top picks for service businesses in Thailand?
20
CLMV-linked Tourism ICT
21
Source: EIC analysis based on data from Euromonitor and NBTC
Can we reap the full benefits from digital disruption?
17
Unit: Petabyte Unit: THB Bn
47
Thailand’s e-commerce value Thailand’s mobile data usage
<1
360 2,700 105
2010 2015 2020F 2010 2015 2020F
AI IoT Big Data Analytics
How much does it cost to lag behind other countries?
22
* As of 2015 ** Unicorn is a start-up company valued at over $1 billion Source: EIC analysis based on data from WEF, CB Insights, NESDB, MDEC Malaysia, MTI Singapore and spectrummonitoring.com
Capacity for
innovation ranking*
Unicorn mobile apps**
ICT contribution
to GDP 2% 8% 7%
70 13 18
-
Mobile bandwidth
(MHz)
ICT law ranking*
Broadband internet coverage
53% >90% >99%
180 240 230
98 8 3
Will the national e-payment elevate us as a digital nation?
23
Any ID
e-government
Building awareness
e-Tax
Card distribution
Efficient transfer
Tax collection
Anti corruption
Source: Ministry of Finance
What are our top picks for service businesses in Thailand?
24
CLMV-linked Tourism ICT
HQ
25
Source: EIC analysis based on data from Open Development Initiative (ODI), Ministry of Commerce, BOT and IMF
Are we poised to become the service hub of CLMV?
FDI from Thailand
+44%
Tourist arrivals into CLMV
Border trade
+17%
+19%
B
Annual growth (2010-2015)
CLMV GDP Growth
6-8%
What are other benefits beyond transport connectivity?
26
Source: EIC analysis based on data from Kansas Department of Transportation, Community of European Railway and Infrastructure Companies (CER), and Schiphol Group
I-70 and 110th St. interchange in Kansas
State tax revenue
$51 mn
$34 mn
2005 2006
(Completed in 2006)
Urbanization along the Paris – Lyon TGV
Office space investment
€80 mn
€120 mn
1980 1981
(Completed in 1981)
Schiphol’s Aerotropolis
2,000 60,000
Total employees
Airport-only Aerotropolis
(Completed in 1995)
27
So, what’s the catch?
Source: EIC analysis based on data from World Bank and CEIC
37%
54%
35%
12%
Proportion of employment in S.Korea
End of transport development, Phase 1
1980 1995
26 USD Mn
Proportion of FDI in China
16%
65%
Rural road investment
High-speed rail investment
2000 2015
83 USD Mn
7 USD Mn 40 USD Mn
63%
31%
EIC conference:
Is investment our silver bullet?
Sutapa Amornvivat, Ph.D.
Chief Economist & First Executive Vice President
Economic Intelligence Center (EIC)
8 June 2016